Total reward statements: Is online or paper best?

The decision to offer online or paper-based statements can depend on the size, nature and demographics of a workforce, and the available budget.

Online is typically the most popular method, but some employers are moving back to paper statements.

Online statements can be cheaper and updated more easily.

Paper may be more accessible and shared with employees’ families.

Case study: Yorkshire Water goes back to paper total reward statements

Yorkshire Water, which first introduced total reward statements in 2006, tried issuing them online in 2007 but has since returned to paper.

Its change of heart followed lower-than expected logins achieved by the online statements, which it put down to employees needing to remember to log in – a particular issue for its many field-based staff.

Yorkshire Water, which recently switched providers to Benefex, provides total reward statements for all its 2,400 employees. This inclusivity is important to its reward strategy, which is why 2007’s low viewing levels were such an issue.

Karen Rider, employee relations and reward specialist, at Yorkshire Water, explains: “The variety of financial and non-financial rewards is extensive and part of our reward strategy is for employees to fully understand the value of their total reward package.

“Our decision to issue offline statements meets the needs of our people, and is particularly effective for our large field-based population.”

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Case study: National Grid stays offline for total reward statements

National Grid, which has offered total reward statements for over five years, decided against moving online when the statements were relaunched in 2010.

The relaunch was part of a wider strategy to enhance the employer brand after a staff survey indicated a lack of understanding of the total package.

Online statements were originally planned as part of the relaunch, but staff feedback indicated a preference for paper statements, says Helen Ratcliffe, global compensation and benefits adviser at National Grid.

Some staff said they would like their statements online, says Ratcliffe. “But it was felt that in order to provide a comprehensive service to employees, both paper and online statements would have been needed, and paper statements were felt to be the best approach in the short term.”

All National Grid’s UK employees receive a total reward statement.

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There has been a recent revival in delivering total reward statements on paper rather than online, says Peta Hodge

Should total reward statements be delivered online or on paper? The answer depends on factors such as the business reasons for providing statements, the size, nature and demographics of the workforce, and the available budget.

Most new total reward statements are launched online, but some providers have reported a slight shift back to paper. Matt Waller, chief executive at Benefex, says that over the past three years, 70% of clients have offered online statements, but so far this year, more new clients (55%) have opted for paper.

This could be a response to the economic climate, with employers unable to give pay rises or bonuses seeking to promote other aspects of reward to disengaged workers. Waller says paper statements are about ‘pushing’ the message out and demanding nothing of staff, while online are about ‘pulling’ staff in to get information for themselves and will work only if they are willing to ‘buy’.

Julia Turney, head of benefits management at Jelf Employee Benefits, says paper statements have become increasingly important in selling a package. “Employers are having to work harder at promoting other areas of the employment package,” she adds.

But selling the package is not the only priority in these tough times. Sanjay Shingadia, managing director of Strait Logics, says downsizing and cost-cutting have resulted in many employers moving away from paper statements. “The renewed interest in paper statements does not fit with our experience,” he says. “A number of clients have switched, or are looking to switch, to online total reward statements as they see greater benefits with a dynamic tool than a static, paper-based total reward statement.”

What are the employer’s objectives?

Deciding which method to use will also depend on employers’ objectives. Ben Wells, senior consultant at Buck Consultants, says paper is likely to be preferable for employers wanting to reduce the risk of people leaving. But he adds: “If the objective is not just to promote a value but to get people actually to take action, then online is much better.”

On the face of it, online has significant advantages. For a start, it can be the cheapest option. Establishing a ballpark figure is tricky, but Wells says employers should expect to pay in the region of £10,000 for off-the-shelf total reward statements and £30,000 for a more bespoke approach. Although the data processing costs for online and paper statements may be similar, paper costs (particularly from printing) are likely to be higher. Wells adds: “If budget is a concern, then we would probably say go for online. It might not have much impact, but it is quicker and cheaper to do.”

Another advantage of online statements is that they do not involve reams of paper, which is an important consideration in terms of corporate social responsibility.

That said, steps can be taken to make the paper route greener. Waller says many employers are demanding that any paper used carries forestry marks supporting sustainable forestry and that the ink is biodegradable. Employers can also choose to offset any carbon they use, something half of those signing up with Benefex in the past 12 months have chosen to do.

Another advantage of online statements is that they can provide more up-to-date information. Waller says: “If [employees] get a pay rise, it will be updated, either in real time or within the month, once the payroll has been processed. Paper has potentially a higher initial impact, but as soon as [staff] get a pay rise or whatever, it is out of date.”

Data management issues

Data management should also be easier online. “If you have data issues, you can change it immediately,” says Wells. “With paper [statements], you cannot take it back, so the inaccuracy is out there.”

If employers require a live data feed, it may take longer to set up, but Wells says: “Data quality will be much higher because employers are constantly updating it.”

Another attraction of online statements is they can link to other tools. Colin Evans, head of reward at Hay Group, says: “You can have hyperlinks to things to do with the employee brand, HR and modelling. [Employers] can take people to a pensions modeller or a monthly saving modeller.”

Online, it is simpler to track how many people actually look at their statements, making it easier to justify the business case. “Looking at all the potential advantages, you might ask: why wouldn’t you use online?” says Evans.

“But most employers gravitate to paper and I think there are good reasons for this. All the organisations I have ever worked with, or for, have issues with data. Unless [employers] have high-quality data, many of the benefits of online begin to pale.”

But Strait Logics’ Shingadia disagrees, saying some technology has comprehensive data validation routines. “The majority of the data cleansing and quality control is done at the data import stage and where the web application reports back any data irregularities. Also, data is uploaded only if it conforms 100% with the [employer’s] rules.”

Can all employees access information?

However good the data, a real issue for employers with large staff populations who do not have computer access at work, is that not all employees can access it.

Barriers to access can be attitudinal as well as physical. “What you tend to find is the more people earn and the more variety they have in their [reward] package, the more they will use [a statement],” says Wells.

Employers may get excited about online’s bells and whistles, but many staff still prefer paper, which can feel more private and is easier to take home to share with family.

Some employers may decide to provide some workforce segments with paper statements, and give others access to information online. But what they should not do is offer all employees the same information in both formats. “It is a waste of money,” says Wells. “What you do is destroy the value of one or the other, and it tends to be the online.”

Employers that do this typically see online take-up reduced from about 50% to 2-3%.

A more successful approach is to provide detailed information online, but use paper to communicate specific events, such as changes in bonuses or pay reviews.

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